Jim Cramer Calls Moderna and Merck Trial Results Encouraging

MRNA -3.35%

MRK -0.80%

August has been a strong month for the shares of Merck & Co., Inc. (NYSE: MRK) and Moderna Inc. (NASDAQ: MRNA).

Merck’s stock closed 12.6% higher on August 19, while Moderna’s stock closed 176% higher the same day. The rally followed a major announcement from Moderna Inc. (NASDAQ: MRNA) detailing results from its late-stage melanoma vaccine trial. The study combined Moderna’s products with Merck & Co., Inc. (NYSE: MRK)’s Keytruda cancer drug to show that the two worked together to create a customized immune response to attack cancer. For investors watching both names, the outcome mattered because it tied Moderna’s experimental platform to Merck’s established oncology franchise in a single high-profile readout.

Jim Cramer discussed the development during his August 24 morning appearance:

"Let's use the drug stocks as a good example. So, yes, Merck does go up cause of Moderna, and from what I can tell, that is a real serious, I mean my daughter had melanoma, and I like, everybody else who had that, just immediately call the encologist, and calls the dermatologist. It was encouraging for both."

"Let's use the drug stocks as a good example. So, yes, Merck does go up cause of Moderna, and from what I can tell, that is a real serious, I mean my daughter had melanoma, and I like, everybody else who had that, just immediately call the encologist, and calls the dermatologist. It was encouraging for both."

For Moderna, the news offered a welcome boost. Before the stock’s sharp rise, it was up only 13% year to date. The company, which became globally known for its coronavirus vaccine during the pandemic, has faced difficulty since the pandemic ended. In the second quarter, Moderna reported a net loss of $782 million, far exceeding revenue of $145 million. The company’s norovirus vaccine also failed to meet success criteria in early results.

With the melanoma vaccine data now public, the debate around Moderna has centered on whether those results, together with a recent FDA flu vaccine approval, justify a broader re-rating of the stock. That discussion also comes against a backdrop of investor skepticism, reflected in the stock’s short interest and in the fact that hedge fund ownership fell in the second quarter.

Recent bullish coverage has come from Bank of America and Morgan Stanley. Bank of America raised its price target to $170 from $40 and upgraded the stock to Neutral from Underperform, saying the melanoma vaccine had changed the narrative. Morgan Stanley lifted its target to $89 from $39 and highlighted Moderna’s platform strength.

For Merck, Keytruda remains central to the investment case. The drug is one of the top-selling cancer therapies in the world, and it accounted for roughly 50% of Merck’s $16.6 billion in second-quarter revenue. Keytruda sales still increased 5% in the quarter despite the drug being on the market for years, making growth from other products increasingly important to the company’s bullish case. That context helps explain why trial results linked to Keytruda can attract attention well beyond the specific study itself.

During the second quarter, Merck’s arterial hypertension drug Winrevair posted 75% annual sales growth to $588 million, while Welireg sales rose 67% to $271 million. At the same time, the company’s effort to expand beyond Keytruda has weighed on its bottom line. Merck reported a net loss in the second quarter, while headwinds from generics increased to $2.5 billion in 2026.

Hedge fund positioning also shifted in the second quarter. Among 1,006 hedge funds covered by Insider Monkey, 49 held a stake in MRNA, down from 52 in the first quarter. Notable reductions included D E Shaw, which cut its stake by 97%, and Bridgewater Associates, which reduced its position by 85%.

For MRK, 101 funds held a stake in the second quarter, up from 98 in the first quarter. Fisher Asset Management increased its stake by 46% to $4.9 billion.

On a price-to-sales basis, Moderna appears more expensive, with a multiple of 28.28 compared with Merck’s 5.83. At the same time, 16% of Moderna’s shares are sold short.

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Disclosure: None.